Glossary

Vacancy clause

A commercial property condition that removes or reduces coverage for certain losses once a building has been vacant more than 60 consecutive days.

Also called: vacancy condition, vacancy provision, vacancy exclusion, vacancy permit

The vacancy condition in the ISO CP 00 10 form limits coverage when the building where a loss happens has been vacant for more than 60 consecutive days before the loss. In that case the insurer pays nothing for vandalism, sprinkler leakage (unless the system was protected against freezing), building glass breakage, water damage, theft or attempted theft. For other covered causes, fire included, it reduces the payment by 15%.

What counts as vacant depends on who is asking. For an owner, the building is vacant unless at least 31% of its total square footage is rented to a tenant and used for customary operations, or the owner uses it for them. For a tenant, the rented unit is vacant when it holds too little business personal property to conduct customary operations. Buildings under construction or renovation are not considered vacant. Editions differ, so check the form attached to your policy.

The trap is a building that goes quiet without anyone calling it vacant: a seasonal shutdown, a tenant move-out, a renovation that stalls. Tell the broker before the clock starts. Options include a vacancy permit or vacancy changes endorsement, a policy written for vacant buildings, and a routine of securing and inspecting the property. Unoccupied is different from vacant: contents may remain with nobody present. The guide on vacant building insurance and the vacancy clause covers the choices.

Last reviewed October 10, 2026

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Related terms

Exclusion A policy provision that removes coverage for specified perils, property, people or types of loss that the insuring agreement would otherwise include. Endorsement A written amendment to an insurance policy that adds, removes or changes coverage, limits or conditions, and controls over the base form where they conflict. Special form (open perils) A property causes-of-loss form covering direct physical loss from any cause not specifically excluded or limited, rather than only the perils it lists. Loss control The inspections, safety programs and physical improvements that a business and its insurer use to make claims less frequent and less severe. Named perils Property coverage that pays only for losses caused by perils the policy lists, such as fire, lightning and windstorm; an unlisted cause is not covered.

Related guides

Commercial property insurance: what it covers and what it doesn't How the standard ISO commercial property policy works: covered property, causes of loss, built-in extensions and limits, valuation, and the gaps to close. Fire and water damage prevention for commercial buildings Fire costs more per claim, water damage is more frequent. The controls insurers look for, what the property form says, and the protective safeguards condition. Insurance for seasonal businesses How to insure a business that opens only part of the year: peak-season property limits, seasonal income, vacancy rules, payroll audits and mid-year changes. Signs, glass and outdoor property: what commercial property covers Signs, storefront glass, fences, trees and parking lots sit at the edges of a commercial property policy. Where the ISO CP 00 10 limits fall and who pays. Vacant building insurance and the vacancy clause After 60 days vacant, the ISO property form drops vandalism, water damage and theft and cuts other payments 15%. What counts as vacant and how to keep coverage.

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Landlord insurance What landlords need: a DP-3 or commercial property policy, liability, loss of rents, and an answer on habitability and fair housing claims. Self-storage facility insurance What self-storage owners need: property, liability, customer-goods and crime cover, how tenant protection plans differ from insurance, and the lien-sale rules. Short-term rental insurance What short-term rental hosts need: a policy written for nightly rental, liability beyond Airbnb's program, and the proof of insurance some cities require.

Related en español

Seguro de propiedad comercial: qué cubre y qué no Cómo funciona la póliza ISO estándar de propiedad comercial: bienes cubiertos, causas de pérdida, extensiones y sus límites, valuación y los huecos por cerrar.